2024 State of Car Insurance

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Last year, car insurance rates increased by 6%, and the average 2023 car insurance rate was $255.95 for full coverage. Many drivers were hopeful that 2024 would usher in a new season of lower car insurance premiums, but unfortunately, several factors, including carriers playing catch-up with the losses they’ve incurred over the past few years, will continue to contribute to the rise in car insurance rates yet again

It’s predicted that car insurance rates will increase 18.9% in the new year, on average.[1] That means for full coverage, the average 2024 car insurance rate is $304.32 Largely, the hikes are caused by a 45% increase in replacement costs from 2020 to 2023 as well as higher incidents of losses. There has been a steady increase in carriers replacing totalled and stolen cars so these extra costs are spread amongst insured individuals.

The fact of the matter is that insurance companies have been paying out $1.10 for every dollar received in car insurance premiums for quite a while.[2] When carriers dip into the negative, they have little choice but to raise rates to be able to continue paying claims.

Here is everything you need to know about what’s driving up car insurance prices at renewal and how you can drive down your cost.

Key Takeaways

  • Car insurance is expected to become even more expensive in 2024, but rates will cool off towards the end of the year.
  • There are many factors, aside from inflation, that are contributing to car insurance rate hikes.
  • It’s still possible to find a lower car insurance rate, especially if you compare rates every six months.

2024 Car Insurance Rates

In 2024, the average car insurance rate is $304.32. However, premiums vary widely, based on driving record, credit score, the value of the car you’re insuring, the safety of that car, your location and garaging address as well as your age. Here are average car insurance rates by state:

2024 Car Insurance Rates by State

See how the rates in your state compare:


2024 Average Car Insurance Rates

2023 Average Car Insurance Rates

2022 Average Car Insurance Rates













































































































































































































*All pricing is based on SmartFinancial Quotes for full coverage car insurance.
**Rates change daily based on market conditions.

Insurance companies have been paying out $1.10 for every dollar received in car insurance premiums and are playing catch-up.

Factors Causing Increases in Premiums in 2024

Crash Severity and Fatalities

The good news is that driving fatalities were down in 2023 and 2022. According to The National Highway Traffic Safety Administration (NHTSA), traffic fatalities dipped 3.3% during the first half of 2023 but insurers are still struggling to pay for the 19% increase in car accident fatalities from 2019 to 2020.[3]

Distracted driving and driving under the influence contribute greatly to severe crashes. Severe accidents have cost more than premiums insurers collect. In fact, they’ve risen by 50% over the past year.[7]

In 2023, insurers paid out $1.12 in claims for every $1 of premiums they collected. Carriers are playing catch up by raising car insurance rates across the board, not being greedy. In 2024, they will be in better shape, but still paying more, about $1.09 for every $1.[2]

Repair Costs

Many cars on the road are newer models, and since 2017, all new cars come with backup cameras. Since 2017, there have been even greater advances in safety features, which is great news for driver safety. Even though there is a discount for having these features, repairing cars using the latest technology is expensive.

Average car repair costs were up 12% in 2023, costing car owners an average of $4,250 after an accident. Average repair costs on new cars were up even more, at 23.9%[5] The price hikes were mainly due to the fact that most new cars have Advanced Driver Assistance Systems (ADAS), censors, cameras and even headlights that are very expensive to repair and replace. Many windshields are also equipped with intricate tools and cameras, so a simple windshield replacement costs much more than in the past.

Parts Shortages

While many manufacturers have worked out the kinks in the parts shortage that occurred due to the COVID pandemic, many are still struggling with the problem, which has led to price increases on car parts, making it more costly to repair most cars. Many were hopeful that prices would have stabilized going into the new year, but unfortunately, prices remain high.

Manufacturers are specifically still struggling with high demand and low supply of semiconductor chips. Production on some cars has even been compromised with fewer than intended chips, to meet the demand for new cars.

Higher Costs of Labor

The technology of new vehicles, like sensors and cameras, makes newer cars more expensive to repair because labor performed by specialized technicians costs more. Only highly-skilled workers can do the job on new models. On top of that, more hours of labor are needed to fix technologically advanced parts.

Longer repair times mean that drivers have larger rental car coverage claims now than ever before. The average wait time to get a car fixed is 26 days, according to Enterprise Rent-a-Car.[6]


Inflation continues to affect car insurance prices across the country because it affects the price of parts and labor costs as well as vehicle prices. According to Moody’s, the inflation rate is expected to fall to 2% towards the end of 2024, and perhaps cause car insurance prices to remain flat until carriers finish playing catch up.[11]

Car theft

Nearly 500,000 vehicles were stolen in the U.S. in the first half of 2023, an increase of more than 2% since 2022. There were 1,001,967 vehicle thefts nationwide in 2022, equaling over 75,000 thefts a month.[4] Insurers are still paying for these losses, and crime rates have not dropped, thereby causing a continued high rate of comprehensive insurance claims.

Of the states hit hardest by car theft are Illinois, which had an increase of 38%, New York (20%) and Ohio (15%).[4]

Low Inventory

In 2023, there were low inventories of vehicles, due to the chip shortage, which not only raised prices but also created higher costs for insurers replacing totaled cars. Insurance companies were forced to raise rates to catch up with losses that combined premiums did not cover. New-vehicle inventory is finally expected to hit pre-pandemic levels at 3 million this year, which may not result in rate drops but will prevent another hike.[12]

Severe Weather

Frequent severe weather events led to more comprehensive insurance claims over the past few years. According to the Insurance Information Institute, there was nearly an 18% increase in hail claims from 2021 to 2022. These events cost insurance companies $456 billion in one year alone![2]

In 2023, there were historic rainstorms in Florida, New York and Vermont. California faced flooding, mudslides and atmospheric rivers that flooded parts of the state. There were wildfires in Hawaii and parts of Louisiana. The destruction of cars due to severe storms and fires is expected to continue to occur in 2024.

Higher Medical Costs

The at-fault driver’s bodily injury liability coverage, which is required by most states, is what pays for injuries to the other car’s driver and passengers. Medical costs for car accidents are through the roof and have been since 2017. According to the American Property Casualty Insurance Association (APCIA), from 2018 to 2022, the average bodily injury claim cost increased by 40%.[5]

Prices will continue to increase by around 8% in 2024, for both medications and medical services.[8] This rise in cost will affect car insurance payouts and premiums and may lead states to enforce higher minimum requirements if prices remain high going into 2025.

Uninsured Motorists

Many people feeling the squeeze on their budgets are making the unwise decision to go uninsured. Households with an uninsured car rose 5.7% in 2023 from 5.3% in 2022.[9] There is a heavy cost to car accidents that involve uninsured drivers, thereby raising rates for everyone.

Twelve states have already seen an increase of 30% or more in uninsured drivers. The top states for increases in uninsured drivers are:

  • South Dakota up 106%.
  • New Hampshire up 84%.
  • West Virginia up 50%.
  • Oregon up 47%
  • Indiana up 36%.
  • New York (20%)
  • Illinois (38%)
  • Ohio (15%)

Poor Driving Habits

Bad driving habits have been a problem since the COVID pandemic began and have continued now that people drive less.[2] The problem with poor driving is so bad that 40% of those using user-based Insurance (UBI) to drive down premiums saw their rates increase.[10] Speeding tickets are up, and distracted driving causes 3,500 fatalities a year.[13]

Driving Under the Influence (DUI and OWI)

There are more substances than ever, both legal and illegal, that are causing poor driving and car accidents. Cannabis, alcohol, prescription pills and other substances are the most common causes of DUI.


Unfortunately, even with insurance payouts, some car accidents still end up in court. The median personal injury judgment has increased by almost 320% between 2010 and 2022.[7] Lawsuits are one of several factors that contribute to losses for car insurance companies, which they have no choice but to offset with higher car insurance rates.

How To Get Lower Car Insurance Rates in 2024

Shop Around

  • Rates change every day and so do driver profiles, so it’s recommended that you compare car insurance rates every six months by shopping online with an insurance-comparison company like SmartFinancial. You can see which insurer in your area will give you the best prices for the most robust insurance package.

Ask About All Discounts

  • You may get a discount for having a masters degree or having a certain job with an affiliate company. Good student and good driver discounts are very popular and so are multi-policy discounts for people who have more than one car with the same carrier. Bundling often earns customers a discount as well. Each carrier has their own specific discounts, so ask your agent to spend some time reviewing each one with you to see if you qualify. And don’t forget that you get a discount for paying in full instead of installments.

Get User-based Car Insurance and Drive Less

  • Roughly 60% of drivers who used user-based insurance (UBI) saw discounts from 10% to 40%.[10] The other 40% saw their rates go up due to risky driving behaviors or for driving many miles. Make sure you understand the terms of the user-based program you join to make sure you’re one of the 40% who saw their rates drop.

Bundle Home and Auto

  • While most people earn a discount for bundling home and auto, it’s not always a given. If you’re willing to pay the least amount with different insurers, you may save money unbundling your home and auto too. The only way to find out what works out in your favor is to compare auto and compare home insurance separately and ask about bundling. Do the math afterwards to see which option is cheapest.

Schedule an Insurance Review

  • Some but not all insurance agents will ask to do an annual insurance review with you. If yours doesn’t, ask to review all your coverages, to make sure you have the right ones and at sufficient limits. Discuss discounts, your driving history and your loyalty to the company to see if you can get your rate down even more.

Take a Defensive Driver Course

  • Taking a defensive driver course may reduce your car insurance rate, especially if you’re 25 or younger or over 55. Ask your insurer about the discount before you register for a course.

Improve Your Credit

  • In most states, insurance companies can use your credit score to determine your auto insurance rate. If you have low credit, you must start raising it by making on-time payments in full for your bills. That includes making your credit card payments on time and at least the minimum amount. Raising your credit score won’t happen overnight, but if you start now, your rate will only decrease over time.

Increase Your Deductible

  • If you have collision and comprehensive coverages and want to pay less in premiums, increase your deductible. You’ll pay less each month but you’ll be responsible for that deductible amount if your car is damaged in an accident that was your fault or if it is stolen.

Buy a Safer Car

  • The safety ratings of vehicles matter to car insurers. No one wants to insure a car that is not resilient or experiences a high number of fatalities. However, your rates may stay high due to a large number of bad drivers in your area.

Install Anti-theft Device

  • Most newer cars come with built-in anti-theft devices, but you can add them on too, if you have an older car. An anti-theft device may earn you a substantial discount on your comprehensive car insurance coverage.

Drop Unnecessary Coverage

  • The rule of thumb is that if your car is worth less than four thousand dollars or less, carrying comprehensive and collision coverages makes little sense. You’ll be paying more in premiums than what you’ll get as a payout after you pay your deductible.
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Car Insurance Rates 2024 FAQs

When will car insurance prices drop?

Unfortunately, prices will not drop in 2024 but will become stable towards the end of the year. When all of the factors that have contributed to the need to raise premiums are resolved, prices will drop.

What is medical inflation and what does it have to do with car insurance?

Over the past few years, the cost of hospital and medical services has increased dramatically, even more than the overall growing rate of inflation. Therefore, car insurance companies are paying more for bodily injury liability claims.

Can I just get by with liability only?

If you’re financing or leasing your car, the lender will require you to buy collision and comprehensive coverage. If you live in a no-fault state, you’ll need to buy personal injury protection (PIP). Some states also require uninsured motorist coverage. Otherwise, you may be able to buy the state required liability insurance alone.


  1. Bureau of Labor Statistics. Consumer Price Index News Release.
  2. Insurance Information Institute III.
  3. The National Highway Traffic Safety Administration (NHTSA). Traffic Crash Deaths | Early Estimates Jan-June 2023
  4. National Insurance Crime Bureau (NICB). Vehicle Thefts Continue to Increase to Near-Record Highs in 2023.
  5. American Property Casualty Insurance Association (APCIA).
  6. Enterprise Rent-a-Car.
  7. American Property Casualty Insurance Association (APCIA), Auto Insurance: The Uncertain Road Ahead. June 2023
  8. Peterson Center on Healthcare and KFF. How much and why 2024 premiums are expected to grow in Affordable Care Act Marketplaces.
  9. J.D. Power. As Auto Insurance Premiums Spike, Some American Drivers Choose the Risk of Being Uninsured Over Financial Hardship.
  10. Consumer Federation of America
  11. Moody’s. Moody's 2024 Outlooks.
  12. Cox Automotive Forecast: 2024
  13. Centers for Disease Control. Distracted Driving.

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